Headlines

Brazil sugar and ethanol producer Tonon Bioenergia SA, which operates three mills with a total capacity to process 8.2 million tonnes of cane per year, has sought court protection against creditors, the company said late on Wednesday, Reuters reported. Tonon said its debt, largely denominated in dollars, soared following the recent weakening of Brazil's currency. The sugar group's debt in Brazilian reais jumped by 69 percent by the end of September to 2.66 billion ($707 million) compared to the same time a year earlier.

Saudi insolvency law has for some time been something of an unknown quantity for non-Saudis, The National Law Review reported. A wide-ranging reform is due to take effect in 2016, which will express elements of the rescue culture and is likely to make restructurings more common. Increased certainty in the outcome of insolvencies will benefit both Saudi businesses and domestic and foreign creditors alike.

Russia lashed out against the International Monetary Fund and the Ukrainian government on Wednesday as it prepares for a legal battle with Kiev over repayment of $3bn in Ukrainian debt, the Financial Times reported. Anton Siluanov, finance minister, said if Kiev failed to redeem the $3bn bond within 10 days of its December 20 maturity or accept a restructuring proposal tabled by President Vladimir Putin last month, Russia would sue Ukraine. “Well all right, go to court,” Mr Putin told Mr Siluanov in a televised government meeting.

Brazil’s woes deepened on Wednesday as Moody’s Investors Service downgraded all ratings for embattled oil group Petrobras, and the country faced the threat of losing its investment grade credit rating from the agency, the Financial Times reported. Moody’s downgraded all ratings for Petrobras to Ba3 from Ba2, and placed them on review for possible further downgrade. “These rating actions reflect Petrobras’ elevated refinancing risks in the face of deteriorating industry conditions that make it more difficult to raise cash through asset sales,” the agency said.

In theory, the outlook for Greece is better than anyone dared hope just a few months ago, The Wall Street Journal reported. Despite the trauma of the standoff between Athens and its creditors in the first half of the year, which culminated in the imposition of capital controls and the government’s 11th-hour acceptance of a new bailout, it now looks as though the economy will have flatlined in 2015, defying recent predictions of a 2.3% slump. Athens forecasts that the economy will shrink by just 0.7% next year and that growth will return in the second half of the year.

The Italian government will pocket over €4 billion ($4.4 billion) in proceeds from a tax amnesty it launched as part of a broad crack down on Italian money stashed abroad, The Wall Street Journal reported. The additional money will be a boon for the government, as it seeks to meet its budget targets amid a new slowdown in growth in the eurozone’s third-largest economy. However, doubts remain as to whether the amnesty will mark a real change in a country where tax evasion remains a scourge.

Russian Finance Minister Anton Siluanov said on Wednesday that the ailing state development bank Vnesheconombank (VEB) should first sell some of its assets before the ministry gives it financial aid, Reuters reported. Siluanov previously said that the bank will need around $20 billion over the next few years. The government has been debating how to save the bank, with one of the proposals calling for its recapitalisation through domestic treasury bonds. "You must first use VEB's resources ... its accumulated assets," Interfax news agency cited Siluanov as saying.

Spain's Abengoa needs 450 million euros ($496 million) in liquidity, adviser KPMG said in a meeting with creditor banks late on Wednesday although banks said the company needs less, a source present at the talks told Reuters. Abengoa, trying to avoid becoming Spain's biggest-ever bankruptcy, is negotiating a multimillion-euro lifeline with creditor banks which have asked the company to guarantee it with new assets.

Spanish conglomerate Abengoa, teetering on the verge of bankruptcy, has halted construction of power transmission lines in Brazil, a potential setback for the South America nation's bid to emerge from its worst energy crisis in 14 years, Reuters reported. Unions representing construction workers, a wind power industry group and Abengoa's sub-contractor on the new power lines said the Spanish company informed them of the interruption in recent days.

In a related story, Bloomberg News reported that Abengoa SA’s filing for preliminary creditor protection constitutes a bankruptcy credit event that will trigger payouts on some derivatives insuring its debt, according to the International Swaps & Derivatives Association. ISDA’s determinations committee, a group of 15 dealers and money managers that govern the market, said that credit-default swaps on updated 2003 contracts will be triggered, according to a statement on its website. Contracts using 2014 terms won’t pay out.